Gold price can't hold early gains as U.S. stock market rallies

New York (Aug 24)  Gold and silver futures markets are weaker in midday U.S. trading Monday. The early gains in the metals today could not hold amid global risk appetite that is keener to start the trading week. October gold futures were last down $8.10 an ounce at $1,930.20. September Comex silver prices were last down $0.027 at $26.705 an ounce.

Global stock markets were higher overnight. The U.S. stock indexes are solidly higher at midday, including the S&P 500 and Nasdaq hitting new record highs. Risk appetite is upbeat despite two tropical storms brewing in the Gulf of Mexico and wildfires raging in California and Colorado.

President Trump on Sunday announced an emergency authorization for the use of recovered Covid-19 patient blood plasma to fight off the virus. The global stock markets may have gotten a slight lift from this news.

Meantime, markets are looking past a comment Trump made to Fox News over the weekend that the U.S. does not need to do business with China. China and the U.S. appear to be moving along with their “Phase 1” trade agreement reached in January, with China buying U.S. agricultural products at a steady pace. Reports from Asia said major flooding in China in recent weeks has destroyed large tracts of crop land that will keep China on a hefty food import pace.

Traders and investors are looking forward to two big events this week: the U.S. Republican national convention in which President Trump will accept his party’s nomination, and the annual Federal Reserve Symposium that has been traditionally held in Jackson Hole, Wyoming but this year will be virtual. Fed Chairman Jerome Powell is scheduled to speak late this week during the event.

The important outside markets today see Nymex crude oil prices firmer and trading around $42.65 a barrel. The U.S. dollar index is slightly lower at midday and not far above its recent two-year low.

Technically, October gold futures bulls have the firm overall near-term technical advantage. Prices are still in a five-month-old uptrend on the daily bar chart. Bulls’ next upside price objective is to produce a close in October futures above solid resistance at $2,000.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at the August low of $1,865.00. First resistance is seen at today’s high of $1,961.90 and then at $1,975.00. First support is seen at last week’s low of $1,909.60 and then at $1,900.00.

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